Deacon Company is a merchandising company that is preparing a budget for the three-month period ended June 30th. The following information is available Assets Cash Deacon Company Balance Sheet March 31 Accounts receivable Inventory Buildings and equipment, net of depreciation Total assets Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity Budgeted Income Statements Sales Cost of goods sold Gross margin Selling and, administrative expenses Net operating income Budgeting Assumptions: April $191,000 $ 68,400 35,600 67,300 179,000 $ 350, 300 114,600 76,400 16,900 $ 155,600 70,000 124,700 $ 350,300 May $ 201,000 120,600 80,400 18,400 $ 59,500 $ 62,000 $ 67,000 June $ 221,000 132,600 88,400 21,400 a. 60% of sales are cash sales and 40% of sales are credit sales. Twenty percent of all credit sales are collected in the month of sale and the remaining 80% are collected in the month subsequent to the sale. b. Budgeted sales for July are $231,000. c. 10% of merchandise inventory purchases are paid in cash at the time of the purchase. The remaining 90% of purchases are credit purchases. All purchases on credit are paid in the month subsequent to the purchase. The accounts payable at March 31 will be paid in April. d. Each month's ending merchandise inventory should equal $10,000 plus 50% of the next month's cost of goods sold. e. Depreciation expense is $1,400 per month. All other selling and administrative expenses are paid in full in the month the expense is incurred. Required: 1. Calculate the expectercash collections for April, May, and June. 2. Calculate the budgeted merchandise purchases for April, May, and June. 3. Calculate the expected cash disbursements for merchandise purchases for April, May, and June. 4. Prepare a budgeted balance sheet at June 30th. (Hint: You need to calculate the cash paid for selling and administrative expenses during April, May, and June to determine the cash balance in your June 30th balance sheet.)

Budgeted balance sheet are projections of the balance sheet for subsequent budget periods. All of the line items contained in a typical balance sheet are present in the budgeted balance sheet. Instead of creating only one balance sheet for the closing period, a budgeted balance sheet should be created for each period covered by the budget model. Working Note:1 Working Note:2

Answered: Deacon Company is a merchandising…

FINANCIAL ACCOUNTING

10th Edition

ISBN: 9781259964947

Author: Libby

Publisher: MCG

See similar textbooks

Concept explainers

Master Budget

A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It…

Sales Budget and Selling

A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future…

Question

Prepare a budgeted balance sheet at June 30th

earch results for 'You have ju X b Answered: Case 8-33 (Algo) X
C
ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launch
nner 15 Google Calendar A Google Drive Florida Gulf Coast... Gulfline Canvas
Assets
Cash
Accounts receivable
Inventory
Buildings and equipment, net of depreciation
Total assets
3
Deacon Company is a merchandising company that is preparing a budget for the three-month period ended June 30th. The following
information is available
Deacon Company
Balance Sheet
March 31
Liabilities and Stockholders' Equity
Accounts payable
Common stock
Retained earnings
Total liabilities and stockholders' equity
Budgeted Income Statements
Sales
Cost of goods sold
Gross margin
Selling and administrative expenses
Net operating income
Budgeting Assumptions:
86°F
Partly sunny
April
$191,000
114,600
76,400
16,900
$ 59,500
$ 68,400
35,600
67,300
179,000
$ 350, 300
$ 155,600
70,000
124,700
$ 350,300
May
$ 201,000
120,600
80,400
18,400
$ 62,000
ox
June
$ 221,000
132,600
88,400
21,400
$ 67,000
McGraw-Hill Connect
a. 60% of sales are cash sales and 40% of sales are credit sales. Twenty percent of all credit sales are collected in the month of sale
and the remaining 80% are collected in the month subsequent to the sale.
b. Budgeted sales for July are $231,000.
c. 10% of merchandise inventory purchases are paid in cash at the time of the purchase. The remaining 90% of purchases are credit
purchases. All purchases on credit are paid in the month subsequent to the purchase. The accounts payable at March 31 will be
paid in April.
d. Each month's ending merchandise inventory should equal $10,000 plus 50% of the next month's cost of goods sold.
e. Depreciation expense is $1,400 per month. All other selling and administrative expenses are paid in full in the month the expense is
incurred.
TO
Required:
1. Calculate the expectercash collections for April, May, and June.
2. Calculate the budgeted merchandise purchases for April, May, and June.
3. Calculate the expected cash disbursements for merchandise purchases for April, May, and June.
4. Prepare a budgeted balance sheet at June 30th. (Hint: You need to calculate the cash paid for selling and administrative expenses
during April, May, and June to determine the cash balance in your June 30th balance sheet.)
Q
O
DII
%
X
W
ő
A
Url=https%253F
YouTube
&
Question 3
N
Sp
T

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Expert Solution